Digital Startups: how to create them and why prefer them?

Digital Start-ups have much more chances of growth and survival than traditional ones due to the boom of the digital economy and e-commerce. In this article, I didn’t limit myself to explaining how to create a digital startup through a step-by-step guide. First of all, I have identified some good reasons why it is better to prefer digital startups to other types if you want to become a startupper and therefore start your own business.

First, if you plan to create your digital startups, I suggest you work on your strategic skills and abilities. In this regard, Digital Coach offers the Digital Marketing Course, a path designed for those who have decided to embark on a digital world journey.

Continuing reading, therefore, you will find in detail 6 good reasons why to prefer digital startups to traditional ones:

  1. Digital startups require a lower initial investment than traditional businesses.
  2. Working in a digital Startup you will be able to live anywhere and work remotely.
  3. Digital startups are characterized by strong, fast, and scalable growth.
  4. In innovative SMEs, it is possible to exploit the maximum potential of digital marketing strategies and tools.
  5. In an innovative digital company, user profiling is better;
  6. Digital businesses make sure you stand out through innovation.

In addition to the reasons for preferring digital startups and the strategic skills needed for success, it is equally important to understand the challenges.
To get the full picture, the video “Why More Than 90% of Startups Fail” will shed light on the common pitfalls and obstacles that many entrepreneurs face in the digital startup landscape. It will offer you practical advice and strategies to effectively address these challenges.

As you venture into the world of digital startups, it is critical to balance your enthusiasm and innovative ideas with a thorough understanding of the startup ecosystem.

This video will provide you with the knowledge you need not only to start, but also to sustain and grow your digital startup.

Digital Startups: 6 reasons to prefer them to traditional ones

Below I list 6 good reasons that will help you understand why choosing to open a digital startup.

They require less initial capital

The first reason is the fact that starting a digital startup you need less initial capital than that required for a classic company.

Imagine a traditional company made up of shops, stores, and warehouses. Here, in digital all these types of assets do not exist or at least they are not indispensable.

You can start from a website, an application, a software that still has an investment, but is often lower than traditional assets.

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You can live and work anywhere

With digital startups, you can live anywhere and work remotely. You can distinguish between the location from which you manage the business and the location where your customers are, where you market your products and services; they could be disjointed from each other.

what is a digital startup company

Think of the many American Web Companies such as Facebook, Google, and many others that actually have a large part of their staff in the United States, another part in Ireland and then eventually only some employees work from their locality.

Some digital companies direct and manage their business from Headquarters often located on the other side of the world.

Growth is fast and scalable

Now let’s talk about the benefits of scalability and the potential for business growth. By their nature, digital startups can grow much faster than traditional companies.

The fundamental point is to identify the right market niche, therefore the segment to address. Once you find the right idea and business model focus, you have the opportunity to scale rapidly internationally.

Replicating the success formula actively applied in a given country across multiple countries is very simple, and much faster than offline businesses. It can therefore become a repeatable business on a global scale just a click away.

The growth opportunities are exponential and no longer take decades as in the traditional business world. Think of the speed with which high-tech companies such as Facebook, Google, LinkedIn, and many other innovative digital companies have grown which, in less than a decade, have managed to reach a global scale.

In earlier eras, in traditional businesses, the global scale achieved by companies like McDonald’s was only achievable over several decades.

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You can take advantage of Digital Marketing Strategies

Another very important reason why digital startups have advantages and success is that you can exploit the full potential of the digital marketing world. More precisely, you can take advantage of the best digital marketing channels, especially by leveraging the typical online customers who are part of your target.

Among these tools you can find:

  • SEO, Search Engine Optimization, or the so-called positioning on search engines;
  • SEM activities, or Search Engine Marketing;
  • Email Marketing;
  • Social Media Marketing;
  • Mobile Marketing.

These are all innovative tools and methodologies, including advertising ones, which allow you to invest your budget by dedicating it only to customers potentially interested in your business. You can thus avoid wasting part of this budget to talk and communicate with interlocutors who have a low probability of becoming customers of your business.

So the return on advertising investment, the ROI, of any activity carried out in the field of digital marketing is better than that of a traditional type of advertising activity, even for a micro-enterprise: a really interesting opportunity to consider given that the success of innovative StartUps is linked to the customer acquisition channels that it can use.

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User profiling is better

In digital startups, the market of potential customers is much wider and gives you the great opportunity to better segment your users. A niche business, which is a local area would not be sustainable because it would not have enough customers within a city, and could instead become successful if offered online.

Think, for example, of a deep-sea fishing rod shop, which could not find sufficient quantities of enthusiasts in the surrounding area to be able to sustain itself but if brought online it could become very interesting.

Indeed, online it is possible to identify the right target on a much wider geographical basis such as the entire nation. This also allows the small, to those who do not have large capital or a huge scale, to be able to take refuge in a niche and manage it better. In other words, we can focus on a context that the big players are unable to control so well.

You can stand out through innovation

If you want to launch and enhance an online Startup, you have the opportunity to differentiate yourself through digital innovation. You can choose to innovate on the channel, tools, processes, and much more. What better occasion to show your added value? Digital transformation gives you the ability to do this by harnessing the power of innovation.

Creating Digital Startups: step by step practical guide

What is a Digital Startup?

Before illustrating the steps that lead to the creation of innovative digital Startups, it is necessary to give a definition.

Wikipedia helps us to better understand this term:

in economics, the term digital Startup identifies a new enterprise in the form of a temporary organization or a joint-stock company looking for a repeatable and scalable business model. Initially, the term was used only for digital startups operating in the Internet or information technology sector. Today, with the growing influence of software, other industries are also affected by the phenomenon.

From the idea to the digital startup

Every company is born from a “great idea”. It can be enlightenment or a rigorous analysis of the market, the important thing is to recognize the moment when the light bulb turns on and not let it go out. Every detail must be taken care of, without getting discouraged in the face of problems or errors, which are “fantastic learning tools”.

digital startup ideas

The business idea of Digital Startups must be clear and simple to explain. It must be useful, innovative, or in any case different from what any competitors offer. Better still that it is disruptive, that it hits the market as a real novelty. There is no shortage of examples: Amazon, eBay, and Skype (today the largest telecommunications company in the world), but also lesser-known ones, such as NakedWines.com, which sells the “best wines at the lowest prices” by putting consumers in contact with manufacturers.

“Companies of this type look for rigid traditional sectors that cannot satisfy disgruntled customers and find a profitable alternative.”

The business model

If ten years ago digital startups limited themselves to selling goods or banners, with the advent of the “era of the cloud and the crowd” the offer has expanded to include data, services, downloads, contents, applications, contacts, licenses, and as well as personal profiles for targeted advertising campaigns (Facebook does).

There are now several business models for digital startups:

  • E-commerce (with the m-commerce variant for smartphones and tablets).
  • Freemium (offer a product in a free version to basic consumers and a premium one to advanced consumers or companies, as Flickr, Skype, Spotify, or Google do for B2B services).
  • Sale of advertising (but to be profitable you must be able to count on thousands and thousands of clicks).
  • Marketplace, i.e. putting other people’s products and services on the market, withholding a commission. Often the winning strategy is networking. “Innovative small businesses associate with larger groups to take advantage of size and resources and derive mutual benefit”: the former provides innovation and creativity, and the latter offers experience, skills, and access to a wider pool.

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Steps to Startup an online business

The roadmap “which will lead to success” cannot be separated from a business plan, which defines “what to do, how, and when” to attract customers and win their trust. Naturally, the company will need a name (with its brand, website, and mobile application) – which is clear, captivating, and easy to remember. For a startup you also need to Start Up loans and, if you are not lucky enough to have them on your own, Rickman suggests turning to several sources (friends, banks, public contributions, private funds, shareholdings, and crowdfunding), to avoid depending on a single creditor. Then you have to become good at “selling” your project.

The ideal last stop: putting your digital startups up for sale. A good exit from the scene is the last step for those who create innovative SMEs, especially in the digital environment. It is a passage to be carefully planned because it can be “the last chance to be rewarded for all the efforts and possibly get rich”. You need to know how to seize the right moment, the one in which the company established itself, but it still has room for growth. “Whatever you do after the sale, the mistakes and successes you make along your journey will enrich you along the way. In building and growing your business, you have contributed to the economy and your wisdom.

Human Resources for Digital Startups

Human capital is crucial: in digital startups, collaborators, whether they are partners or employees, must be selected with care, because “people create value, guide growth, and complete projects: they are the basis of your success”. Success, however, requires an effective marketing and communication plan to “transmit the right message to the right people at the right time”. We must “communicate, communicate and communicate” because even a “fantastic” idea is of little use if you don’t make it known.

The project must be promoted even before launch and it is necessary to invest in the first customers, even by “spoiling” them so that they trigger word of mouth, which is the best lever to win over others.

New marketing channels for startups

“Today’s business is based on contacts and conversations, on communities and collaboration – explains Cheryl Rickman.

Traditional online marketing methods and social networks complement each other: it’s no longer enough to be found on Google, you have to go where the action takes place, where the communication exchanges take place”.

For digital startups, it is essential to use social media, identify bloggers, influencers, and industry experts, respond to criticisms and comments, and monitor one’s digital reputation. “You have to be good enough to be found where consumers can find you, rather than waiting for them to come to you.”

Innovative companies, therefore, must take advantage of everything that digital makes available: also and above all the new leading figures in the digital world, to get directly to the devices of their potential customers.

Reading recommendations: books on startups

I recommend reading the book “The Digital Startup. Step-by-step practical guide”. From the idea to the market analysis, from the choice of collaborators to the sale or the dream of being listed on the stock exchange. A book, often mentioned in this article, accompanies step by step in the creation of digital startups and more. 

The original foreign version is written by Cheryl Rickman with that typically Anglo-Saxon pragmatic approach, whereby the theory is supported by successful cases, British and American. Cheryl Rickman, online entrepreneur, and English writer, in opening her “The Digital StartUp. Practical step-by-step guide”, states that“ Every minute 180 thousand people use Google and at the end of their search they visit a website. The book is intended to help you get as many people as possible to find your website and buy from you instead of your competitors.”

Also very interesting is the book “Digital Startups and Innovative SMEs. Complete Guide to the Success of an innovative enterprise”. Luca Scali and Silvia Vianello reveal the main digital marketing strategies and techniques through which some entrepreneurs and managers have managed to transform simple start-ups into successful companies. How did they do it? First of all, by avoiding making the classic mistakes that inevitably lead to the failure of a business.

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